India’s January Demand for Clean-Energy Credits Declines 16%

Feb. 6 (Bloomberg) -- Demand for Indian renewable-energy
credits fell 16 percent in January from the previous month as
the failure of regulators to enforce clean-energy targets
prompted companies to abstain from trading.

Credits sold for 1,500 rupees ($28) each, the floor price
set by the regulator, according to REConnect Energy Solutions
Pvt., an Indore-based trader said. Demand for solar credits
bucked the trend by climbing almost 20 times in the period.

“The government hasn’t been very forceful in levying
penalties on companies that haven’t met their targets to buy
credits, especially in the case of non-solar credits, and that
has meant lower demand,” said Vibhav Nuwal, a director at
REConnect Energy Solutions. “In the case of solar, there has
been more interest as there’s more pressure from the
authorities.”

The Indian government requires companies including state-run power distributors, Coal India Ltd., Oil & Natural Gas Corp.,
Tata Power Co. and other large power consumers to buy as much as
10 percent of their electricity every year from renewable
sources. Those unable to secure enough clean power locally can
meet their target by purchasing credits sold by wind and solar
farms, hydropower and biomass plants from the country’s two
power exchanges.

Each credit represents one megawatt-hour of clean
electricity fed into the grid.